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You might think New Zealand would be a big fan — maybe the only international fan — of Canada’s supply managed agricultural monopolies, especially our coddled dairy sector.

So what if it means our market is closed to the entrepreneurial Kiwis? They already do outstandingly well without Canadian customers. Their milk-product exports to Europe and Asia total 11.6 billion New Zealand bucks, which are worth only slightly less than ours. This works out to about $2,400 per year per New Zealander, or 25 per cent of this trade-oriented, well-to-do country’s total exports.

What our supply management system does for them is keep our farmers out of their foreign markets. Our protectionist system could scarcely be better designed to provoke other countries into shutting us out. The predictable result is reflected in the figures — Canada’s milk product exports total only $7.50 per capita, or 0.3 per cent of New Zealand’s.

So they get to make a lot of money and create a lot of jobs while our dairy farmers focus on shooting themselves in the foot, then making themselves comfortable thanks to their power to charge excessively high prices.

Make no mistake about the size of the trade opportunity we’ve handed over by default to New Zealand and other dairy exporters.

Back in the mid 1980s, when New Zealand was heavily subsidizing its dairy farmers and our supply management was still finding its footing, our industry was larger than theirs. Their country of 3.3 million, a big exporter even at that time, produced 6.8 million metric tonnes of milk a year, and our country of 26 million produced eight million metric tonnes.

Then they abruptly dropped all their agricultural subsidies and pushed their farmers to compete globally on price and quality. The result? With a population that has grown by a third to 4.4 million, their annual production tripled to more than 20 million metric tonnes.

Meanwhile, Canada’s population grew at roughly the same rate, but we’ve increased our annual milk production by only a tiny fraction, from eight million metric tonnes to 8.45 million — not nearly enough to keep pace with population growth. Our dairy industry lost market share in a captive marketplace — quite a feat when you consider it’s a food that’s marketed as essential to a good diet.

Yet the New Zealanders aren’t sitting back, rubbing their hands in glee while Canada excludes itself from fast-growing international markets where our farmers could and should be players. It’s taking a principled stand that open markets across the board are more important in the long run than the potential short-term advantage of keeping a single competitor at bay.

Thus, Mike Petersen, New Zealand’s globe-trotting special agricultural envoy, tells me his country is pushing hard for Canada to open up its dairy market to foreign competition if it wants to join a proposed new Pacific trade bloc called the Trans-Pacific Partnership.

This isn’t exactly saying Canada must give up supply management — “We don’t interfere in country’s internal policies,” Petersen told me over coffee on Tuesday. But opening up our market would be tantamount to dismantling the system, which would almost certainly collapse if it lost the power to keep out market-priced competitors. It’s not that our farmers can’t compete, it’s that supply management simply adds too much artificial cost — namely “quota,” or the right to produce, which can set farmers back several tens of thousands of dollars per cow — for it to survive in a free market.

The TPP is not a done deal, but it does appear likely that most, if not all, the 12 countries involved will come to an agreement. The opportunities are immense — a combination of highly developed and fast-developing countries with a combined population of more than 800 million, and total GDP approaching $30 trillion.

But Canada — described in a recent C.D. Howe Institute as a trade laggard in recent years thanks to successive government’s determination to hang onto supply management monopolies in the face of international opposition — is vulnerable to being left out.

“Supply management is a deal breaker,” Petersen said. “If the Americans and the Japanese agree (to open up their agricultural markets) and Canada says it can’t do this, I think the deal will go ahead without Canada.”

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